Wages grew 2.6% between October and December last year - at a faster rate than inflation, figures show.
However, the rate of wage growth slowed, leading experts to suggest households could face a squeeze on spending later this year.
New Office for National Statistics (ONS) figures also indicated that unemployment remained at a 10-year low in December, having dropped by 7,000 to 1.6 million over 12 weeks.
The total number of jobless reached its lowest figure since 2006 in October last year and continued to fall in the three months to November.
According to the Office for National Statistics, unemployment figures fell again in the three months to December by a further 7,000.
The UK now has one of the lowest jobless rates in Europe at 4.8%. A total of 31.8 million adults are in work in the UK - a record high in itself.
Meanwhile, average earnings increased by 2.6% in the year to December, down by 0.2% on the previous month.
ONS senior statistician David Freeman said: "Continued moderate growth in employment has led to a new high in the total employment rate, while the rate for women has reached 70% for the first time on record.
"Overall, the labour market appears to be edging towards full capacity."